THE MEDIA BUSINESS

THE MEDIA BUSINESS; Investor Group to Provide For Expansion of El Diario

By WILLIAM GLABERSON

Published: March 3, 1995

The owners of El Diario/La Prensa, the Spanish-language daily in New York City, announced yesterday that a group of investors had agreed to provide the capital for a broad expansion into electronic and other Spanish-language media.

The new investors include Time Warner Inc.; the Massachusetts Mutual Life Insurance Company; Malayan United Industries, a Malaysian company with industrial and media properties, and a group that includes executives of Wertheim Schroder & Company, the New York investment bank.

Peter W. Davidson, 35, the president of a partnership that bought El Diario in 1989, will remain as president and chief executive of a newly formed company, Latin Communications Group Inc. Carlos D. Ramirez, El Diario's publisher, will also remain in his post.

James A. Harmon, the chairman and chief executive of Wertheim Schroder, is to be the chairman the new company, which he said would use El Diario as a foundation for an ambitious plan to acquire other Spanish-language media outlets.

"This is the early stage of building a media company that will take years," Mr. Harmon said.

People involved in the deal said the new investors had put in about $10 million and had acquired about 70 percent of the equity in the new company. Mr. Davidson and some of his original investors from the purchase in 1989, including Mr. Ramirez, own the balance of the new company.

Mr. Davidson, a former investment banker, has said for a long time that El Diario, founded 82 years ago, could be the building block for the construction of a large Spanish-language media company because of its reputation in Hispanic communities across the country. But, with revenues of about $20 million, El Diario did not provide the financial base for such growth.

Mr. Harmon and Mr. Davidson, who worked together to assemble the new investor group, said the investors were prepared to make large additional investments to finance the growth of the new company.

As a first step in the expansion, Mr. Davidson announced that the new company had reached agreements to buy two Florida television stations in Tampa and Orlando. Both stations are affiliates of Univision, the Spanish language network.